How to Answer "What's Your Valuation?"
It is one of the most uncomfortable questions in a pitch. It does not have to be, if you decide your approach before the meeting.
Practice the valuation question"What's your valuation?" often comes late in a first meeting, sometimes as a casual aside. Founders tend to either name a number they cannot defend or dodge in a way that sounds evasive. Both cost trust.
The investor is usually checking two things: whether your expectations are in a range they can work with, and whether you understand how rounds at your stage are priced. A clear, calm answer does both, whatever the number.
This page explains common approaches; it is not financial or legal advice.
Three honest ways to answer
"We are raising $2M on a post-money SAFE with a $12M cap. $800k is committed, including our lead angel." Clear, factual, and it shows momentum.
"We are raising $2M. We will set terms with our lead investor and are looking at comparable seed rounds in our market as a reference." This is a common, accepted answer, as long as you can still talk about what you expect.
"Based on comparable seed rounds in B2B marketplaces and our traction, we expect a cap in the $10–14M range." Only do this if you can say where the range comes from.
What to avoid
- A number with no reasoning. "$50M, because the market is huge" ends the conversation.
- Refusing to engage. "We don't discuss valuation" sounds like you have not thought about it.
- Different numbers in different meetings. Investors talk to each other.
- Treating valuation as the score. The right partner and clean terms usually matter more than a slightly higher number.
A quick dilution check
| Raise | Post-money valuation | Share sold (approx.) |
|---|---|---|
| $500k | $5M | 10% |
| $1.5M | $10M | 15% |
| $2M | $12M | 16.7% |
| $3M | $15M | 20% |
Share sold ≈ amount raised ÷ post-money valuation. Knowing this lets you answer the follow-up "how much of the company are you selling?" without a calculator. Real rounds add details such as option pools and SAFE conversions.
Example in a practice session
Fictional example.
Practice it before the meeting
The valuation question is easier the tenth time. In Pitch Simulator, describe your company and round, choose a Shark Tank-style judge or a data-driven VC, and set intensity to Hard Mode or Brutal: these personas push on money and terms. Each answer gets a score and a coaching note. Pair it with the other hard questions: "Why now?" and "What's your moat?".
Plans
Pitch Simulator is a PRO tool, included in every paid plan on allinnovativ.dev. See plans and prompt limits.
Frequently asked questions
Should I give a number when an investor asks my valuation?
It depends on your situation. If you already have a SAFE cap or a lead investor's term sheet, say it. If not, many founders say how much they are raising and that terms will be set with the lead investor, or give a range they can explain.
Why do investors ask about valuation in a first meeting?
To check whether your expectations are in a range they can invest at, and to see whether you understand your stage and market. A calm, reasoned answer matters more than the number.
How does valuation relate to dilution?
On a priced round, the share you sell is roughly the amount raised divided by the post-money valuation. Raising $2M at a $12M post-money valuation means selling about 16.7% of the company.
What is a SAFE cap?
A valuation cap on a SAFE sets the maximum valuation at which the SAFE converts into shares later. It is not the same as a priced valuation, but investors often discuss it in similar terms.
Is this financial or legal advice?
No. It explains common ways founders handle the question. For terms and documents, talk to a lawyer or an experienced advisor.
Dreading the question? Practice it with an AI investor.
This All Innovativ page explains how founders answer "What's your valuation?" in an investor meeting: state existing terms (such as a SAFE cap), give the raise amount and say terms will be set with the lead investor, or give a range based on comparable rounds.
It covers what to avoid, a dilution table (share sold ≈ amount raised ÷ post-money valuation), and practice with Shark Tank-style or data-driven VC personas in Pitch Simulator. It is not financial or legal advice. All Innovativ Pitch Simulator is a text-based AI pitch practice tool: an AI investor or buyer persona asks one question at a time and the user types answers. It has four modes (investor, sales, board, partnership) with four personas each, four intensity levels (Warm Up, Normal, Hard Mode, Brutal) and sessions of 5, 8 or 10 questions. Every answer gets a 1–10 score and a coaching note; the debrief scores five categories and lists 3 improvements. Each AI turn uses one prompt from the plan quota. It is included in every paid plan on allinnovativ.dev.